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Home Q & A Board Other Fields Homework Help Business Accounting
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Sparks Stationery Company is a price-taker and uses target pricing. The company has just done an analysis of its revenues, costs, and desired profits and has calculated its target full product cost.  Assume all products produced are sold. Refer to the following information:

Target full product cost   $520,000    per year
Actual fixed cost   $280,000    per year
Actual variable cost   $2    per unit
Production volume   152,000    units per year

Actual costs are currently higher than target full product cost. Assuming that fixed costs cannot be reduced, what is the target variable cost per unit?  (Round your answer to the nearest cent.)
A) $1.84
B) $3.42
C) $2.00
D) $1.58
Textbook 
Horngren's Financial & Managerial Accounting, The Financial Chapters

Horngren's Financial & Managerial Accounting, The Financial Chapters


Edition: 5th
Authors:
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